Silver Housing Bonus up to 20k: $60k to CPF, $0 to cash?

Would you downgrade your HDB flat and use all your net sales proceeds to top-up your CPF and get no cash, to get up to $20,000 Silver Housing Bonus?

I refer to the HDB’s three-quarter page color advertisement on page B11 of the Straits Times on 21 July “A roof over your head, an income for life”

It states that “Did you know?

Right-Sizing – If you sell your existing flat and buy a smaller flat type (up to 3-room flat). You can apply for the Silver Housing Bonus (SHB)”

Under the SHB – if your net sales proceeds from selling your flat is less than $60,000 – your entire net sales proceeds must be used to top-up your CPF account.

This means that you will not get a single cent of your net sales proceeds in cash.

In exchange, you will get $1 for every $3 top-up under the SHB, up to a maximum of $20,000.

Pay resale levy?

Also, according to the HDB’s web site – those who have received a housing grant has to pay a resale levy of up to $55,000.

Moreover, according to the article “6 things you weren’t told about the CPF housing grant” (theonlinecitizen, Feb 21, 2017) – “you need to return the grants back into your CPF account when you sell the HDB flat, PLUS ACCRUED INTEREST over the duration of your occupation in the flat. This is on top of ALL the CPF monies used for your flat purchase (PLUS accrued interest)”.

Hence, even if your HDB flat has appreciated in value, don’t be surprised if you are left with little cash proceeds when you sell your flat.

About the Author

Leong Sze Hian has served as the president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), Hotel Mumbai (associate producer), invited to speak more than 200 times in about 40 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of 2 countries. He has 3 Masters, 2 Bachelors degrees and 13 professional qualifications.